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IPO Details

• IPO Opening Date: September 23, 2025
• IPO Closing Date: September 25, 2025
• IPO Size: ₹745 crore
• Fresh Issue/OFS: The issue is entirely a fresh issue of equity shares.
• IPO Price Band: ₹393 – ₹414 per equity share
• Lot Size: 36 Shares
• Investor Allocation: QIB not more than 50%; HNI not less than 15%; Retail not less than 35%
• Lead Managers: Nuvama Wealth Management Ltd., DAM Capital Advisors Ltd., Anand Rathi Advisors Ltd.
• Registrar: MUFG Intime India Pvt. Ltd.

About the Company

• Anand Rathi Share & Stock Brokers Ltd. (ARSSBL) is an established full-service brokerage house in India with over 30 years of experience. It is part of the Anand Rathi group, a trusted Indian financial conglomerate that has been at the forefront of the country’s financial revolution for over three decades. The company provides a wide range of financial services to a diverse client base including retail, HNI, UHNI, and institutional investors.
• Main products/services: The company’s main offerings include broking services across various asset classes like equity, derivatives, commodities, and currency; Margin Trading Facility (MTF); and distribution of financial products such as mutual funds, AIFs, PMS, and corporate bonds.
• Employees: The company has over 2,000 employees, with a total of 2,082 permanent employees as of March 31, 2025.
• Promoters: Anand Nandkishore Rathi, Pradeep Navratan Gupta, Priti Pradeep Gupta, and Anand Rathi Financial Services Limited.
• Branches/network: As of March 31, 2025, the company has a pan-India presence through a network of 90 branches in 54 cities and 1,125 Authorized Persons across 290 cities.

Financials (Consolidated figures, ₹ in crore)

Source: RHP

Post-IPO Market Cap: ₹2,596.18 crore. P/E FY24: 33.58 times. P/E FY25: 25.06 times.

The company has reported steady growth in its top and bottom lines for the reported periods. Profitability has shown consistent improvement, with PAT margins expanding from 8.05% in FY23 to 12.23% in FY25. This growth has been supported by a significant increase in borrowings to fund working capital.

Anchor Issue

• Total amount raised from anchor investors: ₹220.5 crore
• Number of anchor investors: 15
• The top 10 anchor investors in the Anand Rathi Share IPO were HDFC Mutual Fund (9.11%), Kotak Small Cap Fund (9.11%), Quant Mutual Fund (9.11%), Aditya Birla Sun Life Trustee Pvt. Ltd. (9.11%), SBI Life Insurance Company (9.11%), and Singularity AMC (9.11%), followed by Morgan Stanley (6.80%), Pinebridge Global Fund (6.80%), Kotak Mahindra Life Insurance Company (6.80%), and 360 ONE (6.80%)
• The remaining anchor investors included Goldman Sachs, ICICI Prudential Mutual Fund, and others with allocations ranging from 1-5%
• The total allocation to mutual funds was 43.23%.

Salient Points

• Use of Funds: The net proceeds of ₹745 crore, which is a complete fresh issue, will be utilized primarily for funding long-term working capital requirements (₹550 crore), with a focus on the Margin Trading Facility (MTF) business, and the rest for general corporate purposes.
• Business Scenario: The Indian broking industry is valued at approximately ₹520 billion in FY25 and is projected to grow at a CAGR of 16-18% over the next few years, driven by increasing financial literacy and low capital market penetration.
• Business Verticals: The company operates through two main business verticals: Broking and Non-Broking. The Broking segment includes equities, derivatives, commodities, and currency, while the Non-Broking segment comprises the Margin Trading Facility and distribution of investment products.
• Revenue Model: Revenue is generated from brokerage fees, interest income from the MTF book, and commissions from the distribution of financial products like mutual funds, AIFs, and PMS. In FY25, broking contributed 60.34% to revenue from operations, while non-broking contributed 22.77%.
• Growth Strategies: The company aims to increase its Average Revenue Per Client (ARPC) by cross-selling products, especially expanding its high-margin MTF business. It plans to enhance its geographical presence in Tier 2 and Tier 3 cities and invest in technology, including AI, to drive business excellence.
• Risks: The business is subject to market volatility and intense competition from both full-service and discount brokers. It faces significant regulatory risks, including a notice from SEBI concerning the ‘fit and proper’ person criteria for its Chairman & MD, which is currently sub-judice. The company is also involved in various legal proceedings related to the NSEL matter.
• Revenue Split by Service (FY25): Broking and related services accounted for 60.34% of revenue from operations, interest on MTF was 13.51%, distribution income was 9.26%, and other operating income was 16.89%.
• Clients: The company serves a diverse client base of over 2.21 lakh active clients as of March 2025, including retail investors, HNIs, and institutions. It boasts high client retention, with about 45% of its active clients having been with the firm for over five years.
• CAGR (FY23-FY25): Revenue from operations grew at a CAGR of 34.45%, while PAT grew at a CAGR of 65.68%.

Peers (Consolidated figures for FY25, ₹ in crore)

Source: RHP & SBI Securities

Management Commentary

• The company’s business model is focused on addressing the investment needs of customers and growing their Assets Under Management (AUM), rather than competing on volume and market share like discount brokers.
• A key vision is to de-risk the business from capital market volatility by increasing the revenue contribution from the non-broking segment to 50% from the current 40% over the next two years.
• The entire IPO proceeds of ₹745 crore are a fresh issue to fund working capital requirements, with a substantial portion (₹550 crore) dedicated to expanding the Margin Trading Funding (MTF) book to cater to inherent client demand.
• The company differentiates itself through a ‘phygital’ model, combining strong digital platforms with a physical relationship manager (RM) touch, which builds long-term client trust and results in high customer stickiness.

Opinion

• I may not apply for the IPO.
• Post-IPO equity capital: ₹31.36 crore, P/E for FY24: 33.58 times, P/E FY25: 25.06 times.
• The company is an established full-service brokerage firm with a strong brand legacy of over three decades. \
• However the pricing appears steep for its size.
• This post is exploratory and educational purposes only.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.